Recently you may have seen the news that Warren Buffet, the multi-billionaire investor and his Berkshire Hathaway [NYSE: BRK-A] investment company had teamed up with a private equity firm to pay USD$28 billion for the HJ Heinz Company [NYSE: HNZ]. Now everybody knows that Warren Buffet is what is considered a “value investor” – he buys on the cheap and sells at the highs. That simply means he believes the market has undervalued a company’s current and future earnings potential and seeks to buy the stock at what he sees as a discount to the real value. So many investors and market commentators are intrigued at the latest offer, with Buffett agreeing to pay USD$72 per share for a company that had closed the previous day at USD$60.48.

Call it what you will – but that is certainly not value investing. So either Buffett has lost the plot, or there is more to the deal than meets the eye. Buffett and his team are no fools, so with a little digging, the following facts come to light…

Has Buffett lost the plot?

Don’t be fooled into thinking that Buffett’s swoop on Heinz means you should be piling into consumer goods shares at current prices. The deal is much more about clever financial engineering than any sort of great equity growth story. In fact, the way this deal is structured suggests that Buffett wants to ensure that he is exposed to less risk than normal shareholders.

Most of Buffett’s investment and return is coming in the form of preference shares ($9bn of them with another $4bn of equity on top). Preference share dividends get paid out before ordinary dividends.

So this means Buffett has first claim on the company’s post-tax profits. These preference shares are rumoured to be paying him a very juicy annual return of 9% or $810m. When you think that Heinz’s post-tax income is expected to be around $1.1bn in 2013, that’s a nice chunk of the profits for Buffett. But the thing is Heinz is being loaded up with debt – around $20bn of it » Continue Reading.

Ecuador has granted political asylum to Julian Assange, the founder of Wikileaks, citing concerns for his human rights, as he fights extradition from the UK to Sweden. The consulate had put out a press statement suggesting that he would not get a fair trial.

Mr Assange took refuge at the Ecuadorian embassy in June to avoid extradition to Sweden, where he faces questioning over assault and rape claims, which he denies.

The UK police have surrounded the embassy, which should make for a lot more headlines!

Undocumented immigrants are applying for the temporary right to live and work openly in the US, based on some changes to the immigration laws being proposed by Obama.

Illegal immigrants are getting their records in order as the Department of Homeland Security (DHS) starts accepting applications for the programme, which would allow them to remain and work for at least two years.

The Latino vote could prove crucial in the upcoming elections

Currencies

This article was supplied by our forex guest blogger – James White, an English citizen who moved abroad to France to live the rest of his days out in the sun. James managed to saved £3000 when converting his life savings with the help of www.currencies.co.uk, the experts in foreign exchange.

Whether you’re travelling abroad, emigrating, buying property or goods or paying for a service provided by an overseas company it’s always going to be in your best interests to avoid fees and » Continue Reading.

Loans

Credit Cards

Many of today’s consumers expect to be able use a debit or credit card to buy almost anything that they want. This might include a small $5 sandwich or even your $3 cappuccino at your local cafe. And with this shift to a cashless society, some restaurant owners are needing to adapt to the changes of society.

Most restaurant owners have responded resoundingly: in fact, 92% of full-service restaurants now take cards, according to Euromonitor data. New technology lets even food trucks and tiny vendors » Continue Reading.

Investments & Trading

Markets are funny thing – and as we move into the latter part of 2013, the average returns for all the big asset classes are set to be low for decades to come. But there are some ways in which you can ensure that you can be above average.

Taking the London Business School’s (LBS) forecasts for real returns into account, the real returns for the big asset classes over the next 30 years are somewhat bearish. Based on their forecasts, Term deposits will actually » Continue Reading.

From the blog

People understand that having a real estate portfolio as part of an asset sheet is one of the ways to success. But real estate holdings require time, care and maintenance. Real estate holdings, whether they are commercial or residential need to be taken care of from the viewpoint of structuring the financial aspects of the purchase to the renting aspect. Particular attention must be made as to the type of tenants that want to rent the property that you have.

Other news from around the world

Chicago is an important city in terms of history, entertainment and location. Since its days as a gangster’s paradise, ‘the windy city’ has been a hub of contemporary culture and decadent glamour, and now we bring you the best of the boutique hotels in Chicago . Located on the shore of the Lake Michigan, Chicago is a great destination travel for people who love blues and jazz, comedy and » Continue Reading.